The things that matter most when you pick a bank

When you open a checking account, you are choosing where your money sits and how you move it. The bank you pick affects what you pay in fees, how fast you can get cash, whether you can deposit checks from your phone, and what happens if you overdraw. Most banks offer the basics — a debit card, online access, direct deposit — but the details differ enough to cost you real money or save you real money over a year.

The five things that matter most are monthly fees, overdraft charges, minimum balance requirements, ATM access, and how the bank handles deposits. Start by deciding whether you want a traditional bank branch you can walk into, an online-only bank with no physical location, or a credit union. Then compare the specific costs and features within that category.

Key Takeaways

  • Monthly maintenance fees range from zero to $15 or more, and many banks waive them if you keep a minimum balance or set up direct deposit.
  • Overdraft fees typically run $25 to $35 per transaction, and some banks charge multiple fees in a single day if you overdraw by small amounts.
  • ATM access matters if you use cash regularly — banks with large networks cost less than banks with few ATMs, where you pay out-of-network fees.
  • Check deposit speed varies from same-day to three business days depending on the bank and whether you deposit at an ATM, branch, or mobile app.
  • Minimum balance requirements can be $0, $500, or $2,500, and falling below the minimum often triggers a monthly fee or account closure.

Monthly fees and how to avoid them

Most banks charge a monthly maintenance fee between $0 and $15, though some charge more. The fee covers the cost of maintaining your account and the bank's systems. You can often waive it by meeting one of these conditions: keeping a minimum balance (usually $500 to $2,500), setting up direct deposit, or making a certain number of debit card transactions per month.

Online-only banks tend to charge $0 monthly fees because they have no branch costs. Traditional banks with physical locations often charge $5 to $12 per month but waive it if you meet their conditions. Credit unions typically charge $0 to $5 and have looser waiver requirements. Before you open an account, ask the bank or credit union exactly what waives the fee — do not assume direct deposit alone will do it, because some banks require direct deposit plus a minimum balance.

If you cannot meet the waiver conditions, pick a bank that charges $0 monthly. Paying $12 a year sounds small until you realize an online bank offers the same features for free.

Overdraft fees and protection options

An overdraft happens when you spend more money than you have in your account. Most banks charge $25 to $35 per overdraft transaction, and some charge $35 to $40. The fee applies even if you overdraw by $1. Some banks charge multiple overdraft fees in a single day if you make several transactions while overdrawn — one bank might charge you $105 in fees for three separate purchases that pushed you over.

Many banks now offer overdraft protection, which means they either decline the transaction (so you do not overdraw) or transfer money from a linked savings account to cover it. Declining the transaction costs nothing. Transferring from savings usually costs $0 to $10 per transfer. Ask whether the bank automatically enrolls you in overdraft protection or makes you turn it on yourself — some banks enroll you by default, others require you to opt in.

A few banks offer a grace period: if you overdraw, you have 24 hours to deposit money before they charge a fee. This is rare but worth asking about. If overdraft fees worry you, pick a bank that declines transactions rather than charging fees, or use a bank that offers a grace period.

ATM networks and out-of-network fees

If you use cash regularly, ATM access matters. Banks with large ATM networks let you withdraw cash without paying a fee. Banks with small networks charge you $2 to $3 every time you use an out-of-network ATM — that adds up to $50 or more per year if you withdraw cash weekly.

Large national banks like Chase, Bank of America, and Wells Fargo have thousands of ATMs. Smaller regional banks have fewer. Online-only banks have no ATMs of their own but often partner with networks like Allpoint or MoneyPass, which include ATMs at grocery stores and convenience stores. Credit unions often share ATM networks with other credit unions, giving you access to thousands of machines.

Before you open an account, check whether there are ATMs near your home, work, and places you shop. If the bank has few ATMs in your area, calculate how often you would pay out-of-network fees and whether that cost outweighs any savings on monthly fees.

Minimum balance requirements and what happens if you fall short

Some banks require you to keep a minimum balance in your account at all times. Common minimums are $500, $1,000, or $2,500. If your balance drops below the minimum, the bank charges a monthly fee (usually $5 to $15) or closes your account. A few banks have no minimum at all.

Minimum balance requirements matter if you live paycheck to paycheck or have irregular income. If you cannot reliably keep $500 in the account, a bank with a $500 minimum will cost you money. Online banks and many credit unions have $0 minimums. Ask the bank whether the minimum applies to your total balance across all accounts or just the checking account, because some banks let you count savings account money toward the minimum.

Also ask what happens if you fall below the minimum. Some banks charge a one-time fee and let you stay open. Others charge a monthly fee until you bring the balance back up. A few close the account automatically, which can damage your banking history.

How fast checks and mobile deposits clear

When you deposit a check, the bank does not give you the money immediately. The check has to clear, which means the other bank verifies the funds exist and transfers the money. The time this takes varies by bank and deposit method.

Mobile check deposits (taking a photo of the check with your phone) typically clear in one to three business days. Deposits at an ATM usually take one to two business days. Deposits at a branch teller often clear the same day or next business day. Online-only banks with no branches only offer mobile deposits, which take longer than branch deposits.

If you receive checks regularly and need the money fast, a bank with branch locations and same-day clearing for teller deposits might be worth the monthly fee. If you rarely deposit checks, mobile deposit speed does not matter much. Ask the bank for their specific clearing timeline before you open an account — do not assume all banks clear checks at the same speed.

Interest rates on checking and savings accounts

Most checking accounts pay little to no interest on your balance. A few online banks offer 0.01% to 0.05% annual interest on checking accounts, which means $100 in the account earns $0.01 to $0.05 per year. This is not enough to matter unless you keep thousands of dollars in checking.

Savings accounts pay more interest than checking accounts — currently 4% to 5% at online banks, compared to 0.01% at traditional banks. If you have money you are not spending immediately, a separate high-yield savings account at an online bank makes sense. But do not choose a checking account based on interest rate alone, because the difference is too small to offset higher fees or poor ATM access.

Ask the bank whether they offer a linked savings account and what interest rate it pays. Some banks bundle checking and savings together with better rates if you maintain both accounts.

Online and mobile banking features

Every bank now offers online banking and a mobile app, but the features vary. Standard features include checking your balance, viewing transactions, transferring money between your own accounts, and paying bills. Some banks also offer person-to-person transfers (sending money to another person's bank account), early direct deposit (getting your paycheck one or two days early), and spending alerts (notifications when you spend above a set amount).

If you manage money on your phone, test the bank's app before you open an account. Some apps are slow or crash frequently. Others are fast and intuitive. Read recent reviews on the app store to see what other customers say. If you prefer to bank in person, make sure the bank has branches near you and that staff can help you with account questions.

Frequently Asked Questions

What is the difference between a bank and a credit union?

Banks are for-profit companies owned by shareholders. Credit unions are nonprofit organizations owned by their members. Credit unions often charge lower fees and offer better interest rates, but they may have fewer ATMs and branches. Both are insured by the federal government up to $250,000 per account.

Should I open an account online or at a branch?

Online accounts are faster to open and usually have lower fees. Branch accounts let you deposit cash and talk to staff in person. If you use cash often or like face-to-face help, a branch bank makes sense. If you rarely use cash and are comfortable with technology, an online bank saves money.

Can I change banks if I do not like my account?

Yes. You can close your account and open a new one at any time. Before you close, make sure all automatic payments and direct deposits are switched to your new account. Some banks charge a fee to close an account early, though most do not. Check your account agreement before you open.

What if I have bad credit or a history with ChexSystems?

ChexSystems is a database banks use to check your banking history. If you have unpaid overdrafts or closed accounts due to fraud, you may appear on ChexSystems and be denied a regular account. Some banks and credit unions offer second-chance checking accounts for people with ChexSystems records. Ask whether the bank you are considering reports to ChexSystems and whether they offer second-chance accounts.

Do I need a minimum amount of money to open an account?

Most banks require an opening deposit of $0 to $100. Some require $500 or more. Online banks often require $0. Ask the bank what opening deposit they need before you apply. The opening deposit is separate from the minimum balance requirement — you may need to deposit $25 to open but keep $500 in the account to avoid fees.